The IPOX® Week #751
Alternative Energy Revolution, AI Trump Carry-Trade Fears.
IPOX U.S. ETF: +6.72%,
IPOX E.U. ETF: +4.27%,
IPOX INT’l ETF: +3.20%
IPOX® Fixed Income extends big rally as long-end drops below 4%.
3 U.S. biotechs gain in up-sized debuts. Aircon giant Midea $4.6B IPO in HK.
OVERVIEW: Most IPOX® Equity Strategies soared ahead of quarterly U.S. Futures and Options Expiration, topping all benchmarks and benefiting most from the expectation for a powerful mix of 1) a muted inflationary outlook amid a gradual reduction in Fed Funds rates with 30-year U.S. government yields – our favorite gauge for IPOX® Sentiment – dropping below the key 4% mark and driving the big rally in the IPOX® Fixed Income Indexes in the process, 2) slow U.S. economic growth, 3) perceived outperformance of innovative Industrials and Tech stocks on the back of potentially massive U.S. government support for the alternative energy, health care and information technology sectors to counter potential China dominance, 4) a solid earnings season for the mostly unseasoned companies in our investment universe and 5) Index inclusion effects.
In the U.S., e.g, the IPOX® 100 U.S. ETF (FPX), key U.S. IPO performance benchmark underpinning ETFs, SMA’s and Futures, rocketed higher by +6.72% to +10.09% YTD, outpacing the S&P 500 (SPX) by +270 bps. and well ahead of U.S. small- and mid-caps, as well as mega-cap Technology stocks last week. Positive Momentum extended to other Regions and to the IPOX® Thematic Strategies: Top of the list ranked the innovative IPOX 100 U.S. ESG/Climate (IPXT) which soared +9.12% to +23.27% YTD, ranking as the Top performing IPOX® Strategy last week:
Investors looking for “Trading Venue Agnostic”-exposure to European Equity Capital Markets (ECM) deals tracking by IPOX® continued to be well rewarded last week, outsmarting the Europe-Listings centric benchmarks once again. Specifically, the IPOX® 100 Europe ETF (FPXE) soared +4.27% to +17.72% YTD, a large +300 bps. ahead of the European Market and more than doubling the benchmarks YTD performance with a +17.72% gain YTD. In the cross-section - and considering Denmark’s DSV’s (DSV DC: +12.40%) deal for key German logistics firm Schenker - the IPOX® Nordic (IPND) added +4.31% to +23.54% YTD. This is notable as the portfolio holds a relatively small stake in IPO M&A Wegovy-maker Novo Nordisk (NVO DC: +3.42%) when compared to the MSCI Nordic (MXND) which is currently 29.80% allocated to the drug maker.
On the back of short covering and expiration positioning, select Industrials and Technology stocks heavily weighted in the respective IPOX® Portfolios recorded big gains as equity sentiment turned decidedly positive after Tuesday’s U.S. presidential debate with positive equity sentiment eventually trumping carry trade-fears. E.g, all things Industrials recorded big gains, including IPOX® 100 U.S. ETF (FPX) heavyweights electrical power equipment maker de-SPAC Vertiv Holdings (VRT US: +19.49%), best-in-class global climate play Spin-off Carrier Global Corp (CARR US: +10.12%), Germany’s wind farm player strongly recovering Siemens Energy (ENR GY: +22.53%) and Spin-off GE Vernova (GEV US: +13.67%). In addition, renewed enthusiasm over AI and well-bid pre-IPO valuations propelled sentiment for select technology stocks, some heavily weighted in the IPOX® Portfolios. This included chipmaker ARM (ARM US: +25.65%), as well as application software makers Samsara (IOT US: +7.70%) and Palantir Technologies (PLTR US: +17.28%), which is set to enter the S&P 500 Index as of Friday’s close.
Amid a strengthening JPY and weak trading across select Chinese IPOs, sentiment in Asia was notably subdued with all respective IPOX® Portfolios recording losses.
THE IPOX SPAC INDEX (SPAC): The Index added +4.98%, recovering from last week’s sell-off to -4.93% YTD. Telehealth platform Hims & Hers Health (HIMS US) surged +21.39%, driven by newfound momentum stemming from social media engagement. Last week’s winner, biopharmaceutical company Disc Medicine (IRON US), pulled back by -5.08%. Two SPACs announced definitive targets, including Southport Acquisition Corp (PORT US: +0.90%), which teamed up with movie and TV program producer Angel Studios. Plum Acquisition I (PLMI US: +16.07%) completed its merger with smart computing ecosystem platform developer Veea (VEEA US), with the new combined company expected to start trading on Monday. One new SPAC launched this week in the U.S.
ECM REVIEW AND OUTLOOK: 22 new listings launched globally, raising a total of $2.45 billion and gaining an average of +17.99% between offer price and Friday’s close. Three sizable listings in the U.S., all within the biotech sector, raised $703.2 million combined, signaling renewed investor interest. NMDC Energy (NMDCENR UH) raised $876.81 million, rising +8.57%, while 99 Speed Mart Retail Holdings (99SMART MK), the largest Malaysian listing in seven years, raised $506.11 million, gaining +13.94%. The three U.S. biotech listings included Bicara Therapeutics (BCAX US: +30.06%), Zenas Biopharma (ZBIO US: +6.76%), and MBX Biosciences (MBX US: +47.81%), all of which upsized their offers prior to debut, a hopeful sign for the U.S. biotech IPO market.
Next week, Chinese household appliances and air conditioning giant Midea Group (300 HK) is set to list H-shares in Hong Kong with a $4.57 billion offer, marking the city’s biggest share sale in over three years. Indian mortgage lender Bajaj Housing Finance Ltd is expected to raise $782 million. In Saudi Arabia, flour company Arabian Mills for Food Products and perfume retailer Al Majed for Oud are set to raise $270 million and $705 million, respectively.
The latest IPOX® Update includes news on the announcement of listing plans for U.S. childhood education provider Kindercare (KLC US), and U.S. cement unit Titan America, at expected $2b valuation. In Germany, academic research publisher Springer Nature is set for a $10 billion valuation, while Dutch grid operator TenneT plans to list its German assets, previously valued at $22 billion.
Follow our IPO Calendar and social media (e.g. Linkedin) for upcoming IPOs, updates on our indexes and the latest news.
